More employers plan to freeze hiring, moderate wages as business sentiment dips: SNEF poll

[SINGAPORE] A larger proportion of employers face uncertain business prospects and are planning for hiring freezes and wage moderation next year, indicated a survey by the Singapore National Employers Federation (SNEF) published on Tuesday (Dec 2).

This year, 72 per cent of respondents reported an uncertain business outlook, up from 58 per cent in 2024.

Almost three in five employers, or 58 per cent, planned to freeze headcount in 2026, according to the survey. This was up from 50 per cent last year. Small employers – those with 50 or fewer employees – were more likely to freeze headcounts, at 63 per cent.

However, the percentage of those that planned to reduce headcount (8 per cent) were largely similar to last year (9 per cent), with large employers – those employing more than 200 employees – being more likely to make such manpower cuts (12 per cent).

One-third of respondents plan to increase hiring.

As for the wage outlook, just under half (48 per cent) of the employers surveyed said they plan to carry out wage moderation or wage freezes in the upcoming financial year, up 10 percentage points compared with FY2024/2025. Employers indicated plans to give a lower wage increment compared to the previous year.

“This indicates more caution in wage outlook among employers, particularly among small and medium-sized employers,” said SNEF. Mid-sized employers refer to companies with 51 to 200 staff.

Rising manpower costs continued to be the top manpower challenge cited by employers for the next 12 months, at 79 per cent. This was similar to 81 per cent in 2024.

Other challenges cited include attracting and retaining professionals, managers, executives and technicians (47 per cent) and a shortage of high-skilled, local talent (42 per cent).

SEE ALSO

Singapore firms plan to dial back on raises, bonuses amid uncertainty: survey

Of the employers surveyed, 62 per cent planned to provide a competitive employee salary and benefits package to alleviate these challenges – down from 70 per cent in 2024.

Other ways to alleviate manpower challenges that were highlighted included upskilling or reskilling employees to meet evolving business needs (45 per cent) and providing more flexible work arrangement options (30 per cent). But the latter method saw a significant decrease from 49 per cent in 2024.

Despite the more cautious outlook, most employers that employ lower-wage workers, at 96 per cent, have planned to provide them with built-in wage increases in the coming year. This reflects continued employer commitment to uplift this group of workers, SNEF said.

Employers that expected not to do well in 2025 planned more modest increases than those that expected to do well.

Nearly 40 per cent of employers planned to give higher wage increments to lower-wage workers than to other employees; 33 per cent planned similar increments for all employees. The remainder indicated that other factors such as performance would be more important than differentiated wage increase based on wage levels.

Hao Shuo, SNEF’s chief executive officer, said: “Employers are navigating 2026 cautiously, in view of rising costs of doing business and uncertainties in the overall global economy. ”

But he added that it is “heartening” that employers continue to invest in their employees, especially lower-wage workers, as “such investments ultimately help them build a stronger, more resilient, and future-ready workforce that can help businesses capture new opportunities in uncertain times”.

He also encouraged employers to align their wage decisions with the recently-released National Wages Council Guidelines, for fair and sustainable wage adjustments.

The 2025 edition of SNEF’s manpower and wages outlook survey was conducted between Jun 25 and Aug 15. It gathered responses from 238 employers, hiring more than 120,000 workers. Respondents came from 19 industries, and included companies of various sizes.